South American Ferro Metals Limited

November 2013

www.safml.com

Profitable Brazilian iron ore

producer

Expansion plans on track:

- Currently 1.5Mtpa

- 8Mtpa

- 16Mtpa

65.5% Fe content

Drilling to increase the

resource

ASX:SFZ

Strong Geology & Resource Base

Technical

5th Highest grade resource in Brazil.1

Lowest 10% on the Brazilian cost curve.1

Total cost of beneficiation production has

dropped in this financial year following full

ramp up of the Second Concentrator in July

2013.

Setting

Ore body runs NE to SW

Herculano & Vale’s Pico mines to the north of

SAFM’s site

Ore body open to the North, and West

Geology

Hematite-rich Itabirite ore

Resource 301.6Mt at 40.7% Fe

Located in the heart of Brazil’s prolific and historic Iron Ore Quadrilateral

1 RBC Prospector - 15 Jun 2012

SAFM

VALE

Drilling to Target Resource Increase

November 2012: Updated resource from 230 million tonnes to 277.9 million tonnes.

April 2013: Increase of its resource estimate within the open pit envelope from

277.9 million tonnes to 301.1 million tonnes.

Mineralisation extends to a depth of over 400 metres. Drilling is underway to target the

core of the deposit at depth and extensions to the north of the current projected pit

envelope. This has the potential to further increase the size of the deposit.

Breakdown of the current resource is :

Ponto Verde Iron Ore Project

(Cut-off Grade Applied: 20% Fe)

Resource Class Tonnes (Mt) Fe (%)

Measured 72.76 41.06

Indicated 101.96 40.68

Measured & Indicated 174.72 40.84

Inferred 126.34 40.45

Total Resource 301.06 40.65

SAFM & Brazil - Environmental

4

Very Simple Current Operation

Very friable material – no blasting

Very simple ore treatment:

- Wet crushing and screening plant: small lump & sinter-feed

- WDRE and WHIMS plants: concentrate

- Vertical thickener to recover water

The existing plants are being used to generate the current products and also as a pilot

plant for the expansion testworks.

Recent Profitability Enhancements

Constructed and Commissioning of Second Concentrator on schedule and within budget

and completed in July 2013. Targeted additional concentrate production of 20,000 to

24,000 tonnes per month, at a grade of approximately 65.5% Fe, which represents an

increase in production of approximately 33%. This increase in production will be at a low

incremental cost which will increase profitability of the operations.

On-site laboratory completed providing quick assay results for production as well as

assisting in design of the enlarged pit.

All production is sold domestically in Brazil and with the expansions plans expect to

export overseas.

September and October SAFM had its production record producing in the full capacity in

the three plants.

v

v

Product Range – Commercial Optimisation

15% or 225 ktpa Lump

Current 1.5 Mtpa ROM Feed

27% or 405 ktpa Sinter Feed

16% or 240 ktpa

Stage I Concentrate

18% or 270 ktpa

Stage II Concentrate

(Commissioned July

2013)

76% Mass Recovery or 1,140 ktpa

Investment Highlights

Only non-Brazilian ASX Listed pure iron ore producer in South America

Located in prolific Iron Ore Quadrilateral (neighbouring Vale)

Near to infrastructure and sell to local domestic customers

JORC resource of 301.6Mt at 40.7% Fe of which 174.7 Mt is Measured and Indicated (5th richest Fe grade in Brazil, Phase III drilling program underway)

BFS for Stage I expansion from 1.5 to 8Mtpa ROM underway

Stage II expansion to 16Mtpa ROM targeted for 1 year after the first one

Growing Profitability - Stage II Concentrator completed and commissioned July 2013

Highly experienced & successful Brazilian leadership team

Expanding to 8Mtpa then to 16Mtpa

Feasibility Study: Companies Involved

Study Management, Plant & Infrastructure and BFS Level Report

Owner’s Team Support and Slurry Pipeline Study

Drilling Campaign

Resource Assessment & Geotechnical Studies

Metallurgical Testworks

Feasibility Study: Companies Involved

Railway Loading Station Design

Mine Planning & Waste/Tailing

Environmental Permits and Water Supply

Financial Model

Feasibility Study: Companies Involved

Market Research

HV Switchyard

Power Transmission Line

Capex/Opex

Feasibility Study Progress

8 Mtpa ROM expansion feasibility study progressing with plant size and equipment

selections being addressed for:

Primary crushing

Secondary crushing

Ball mill

Cyclone classification

Magnetic Concentration

Concentrate transported by slurry pipeline to railway terminal

Tailings thickening, filtration, stockpile and disposal.

Current grind sizing is a concentrate below 0,150 mm.

Average composition of the Concentrate coming from the recent test works is:

Fe SIO2 Al2O3 P Mn LOI

65.5% 3.9% 1.1% 0.02% 0.50% 1.42%

LOW PHOSPOROUS

Feasibility study Flowchart

Plant & Mine Layout

Additional Area for Waste & Tailing

Port access

Memorandum of Understanding with rail corporation, MRS Logistica SA, to develop rail

based port delivery for export of SAFM’s production.

Proposal to rail production to port terminals at Baia de Sepitiba in the state of Rio de

Janeiro, approximately 400 km from the Ponte Verde mine.

The Ponto Verde mine is located 15 km west of the Andaime branch line of the MRS

system, which transports production from the Minas Itabiritos mines adjoining Ponto

Verde.

The rail transportation of the product will utilise existing MRS infrastructure for the

transport and unloading of iron ore products, as well as development of a new loading

terminal.

Port access map

Growth: Stage I Operations Expansion

Stage I Bankable Feasibility Study (BFS) Underway

Will include “Footprint” and “Tie-ins” for Stage II Expansion to 16Mtpa

Accessing export markets

Construction is expected to start in 2014

Funded from operations and debt.

…From 1.5Mtpa to 8Mtpa ROM

Growth Plan: Stage II Operations Expansion

Stage II BFS to begin upon Stage I Study Completion

Mirror image of Stage I Plant

Foot print and tie in established during 8Mtpa expansion design

…From 8Mtpa to 16Mtpa ROM

For more information: Australia

Registered Office

Level 11, 151 Macquarie Street

NSW 2000

Tel: +61 2 8298 2000

Fax: +61 2 8298 2028

Thank you!

Zeca Paixão Chief Development Officer

Mobile: (55) 31 8448-8982

zeca@safm.com.br

Brazil

Av Afonso Pena 3130 9° Floor

30130-009

Belo Horizonte/MG

Tel: +55 31 3281 8777

Fax: +55 31 3281 8997